Needham & Company Downgrades Cogo Group (COGO) to Hold
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Price: $2.39 --0%
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 8
Rating Summary:
1 Buy, 2 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 19 | New: 8
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Needham & Company downgraded Cogo Group (NASDAQ: COGO) from Strong Buy to Hold.
The firm states, "Following 2Q11 results and 3Q11 guidance that reflect a controversial change in COGO’s business strategy, we are throwing in the towel and downgrading shares to Hold from Strong Buy. In hindsight, we have been caught in a value trap. Three months ago, COGO had $2.17 of net cash/share and $1.00+ in 2012 earnings power. Today, cash/share is $1.45 and the company is likely to earn $0.55 in 2012 due to a decision to aggressively pursue scale in a more aggressive pricing environment. With its decision to pursue scale, GM is poised to decline to a range of 10%-11% (vs. 14%-15%) and OPEX is set to rise. We see little long erm value in pursuing scale to the detriment of GM and profitability. As such, we are downgrading shares of COGO to Hold."
For more ratings news on Cogo Group click here and for the rating history of Cogo Group click here.
Shares of Cogo Group closed at $4.68 yesterday.
The firm states, "Following 2Q11 results and 3Q11 guidance that reflect a controversial change in COGO’s business strategy, we are throwing in the towel and downgrading shares to Hold from Strong Buy. In hindsight, we have been caught in a value trap. Three months ago, COGO had $2.17 of net cash/share and $1.00+ in 2012 earnings power. Today, cash/share is $1.45 and the company is likely to earn $0.55 in 2012 due to a decision to aggressively pursue scale in a more aggressive pricing environment. With its decision to pursue scale, GM is poised to decline to a range of 10%-11% (vs. 14%-15%) and OPEX is set to rise. We see little long erm value in pursuing scale to the detriment of GM and profitability. As such, we are downgrading shares of COGO to Hold."
For more ratings news on Cogo Group click here and for the rating history of Cogo Group click here.
Shares of Cogo Group closed at $4.68 yesterday.
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